Virtual Currency basis

Forum|Forum|3 years ago
June 28, 2023
3 replies
25 views

I've converted $10,000 US dollar to 10,000 USDT (stable coin) virtual currency in a service that returns 200 USDT per month but instead of converting it back to USD I roll over that 200 USDT each month back into the service and thus haven't converted anything back to USD or converted to another virtual currency. Am I required to pay taxes on the returns that I roll over?

Ask the Experts - Energy - June 2023

Best answer by LoriC17

Just to add, If you buy crypto, there's nothing to report until you sell. If you earned crypto through staking, a hard fork, an airdrop or via any method other than buying it, you'll need to report it, even if you haven't sold it.

Denisev1220

Level 4

In general the answer is yes. You could have received it but chose not to.

You still received income.

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LoriC17Answer

Level 4

I hope it helps, please let us know if you have any additional questions.. Enjoy your day!!. **Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

rschule1

Level 6

Hi There:

Assuming the 200 monthly USDT is increasing your initial $10,000 USDT by 200 USDT monthly then it is taxable at short term ordinary gain rates. For a thought experiment, 200*12 equals a 24% rate of return, which makes me wonder if such a return is sustainable? Btw, I'm an accountant not a financial planner, so re: viability of investment-please consult with a financial planner.

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